Microsoft will be releasing Windows 7 tablets this year, but its dedicated tablet build of Windows 7 reportedly won't land until next year. (Source: Microsoft)

Microsoft looks to arrive VERY late to the tablet game

According
toBloomberg, sources at Microsoft state that the company
will be making a very late tablet push, unveiling a dedicated tablet operating
system sometime next year (2012).

With Apple announcing its entry-level priced iPad 2 and with a
host of Android competitors like Samsung and Motorola releasing
higher-powered, more expensive entries, the tablet market is on fire. The
competition is particularly fierce on the operating system side where Apple has
poured a great deal of effort to make iOS better suited for a large-screen
device. Similarly Google has put tremendous effort to complete Android
3.0 Honeycomb, which overhauls the past Android UI and makes it truly
tablet-friendly. Even HP's
webOS and RIM are
looking to get a piece of the tablet business

Microsoft, meanwhile stands watching on the sidelines. While it will
release some Windows 7-based tablets this year, the outlook for them is
somewhat poor. They require
Intel x86 processors, and the chipmaker has struggled to deliver energy
efficient Atom chips for tablets. Another trouble spot is the Windows 7
OS itself. The operating system isn't exactly optimized for a tablet
experience, and with dedicated competitors like iOS 4.3 and Android Honeycomb
3.0 on the market, that could seriously stall sales.

Bloomberg quoted Michael Gartenberg, a New Jersey-based analyst,as
meeting the news with pessimism, stating, "If 2011 is the year of the tablet
wars, Microsoft will be awfully late suiting up for that battle."

The one worrisome sign is that Microsoft is reportedly choosing to build on top
of Windows 7, adding more touch features. While Windows 7 is arguably a
great personal computer OS the question is whether even a modified version will
be up to speed on tablets. While such an approach is a quicker and
easier, many were hoping the company would port the Windows Phone 7/Zune
operating system to a tablet, given its more touch-centric UI. To
Microsoft's credit, many users -- including DailyTech readers
-- have clamored for Windows 7-tablets.

Interestingly, Microsoft appears to be preparing to follow a similar approach
that Google
is following with its upcoming Chrome netbook/notebook OS, giving out
test units to commercial partners and the public. Microsoft will
reportedly begin distributing device with test builds of the new OS before the
end of the year.

It is unclear whether current generation Windows 7 tablets releasing this year
will be upgradeable to the new OS next year, but this presumably would be the
case, if hardware makers cooperate.

According to reports [1] [2] by
In-Stat, the tablet business will be booming over the next several years, and
will, in part, cannibalize PC sales. In-Stat predicts over 100 new
designs from Apple, Android makers (Motorola, Samsung, HTC, Sony-Ericcson,
Archos, etc.), RIM, HP (webOS), MeeGo tablet makers (no major named partners),
and Windows tablet makers (Dell, Lenovo, etc.) to enter the market this year.
And it predicts sales by 2014 to rise to 58 million units and by 2015 to
118 million units.